Stanford Announces ‘Record Year’ of ROIs, Realizes $ 12.1 Billion in Earnings

Stanford achieved a record $ 12.1 billion in investment gains in the past year from its merged pool, through which the bulk of the endowment is invested in stocks and bonds, according to the results. annuals published Tuesday.

The total value of the University’s endowment – which includes about 75% of the merged pool’s funds as well as real estate and other assets – is now $ 37.8 billion. The 40.1% ROI marks a significant increase from last year’s 5.6% return and 2019 6.5% return, and it comes in the midst of a successful year of endowment for many Stanford peer institutions.

The merged pool is now worth $ 41.9 billion. University spokesman EJ Miranda called the feedback “very reassuring” and quoted President Marc Tessier-Lavigne’s comment to Stanford News on Tuesday that “the results created a tremendous opportunity to move the agenda forward. Stanford mission “.

Stanford Management Company (SMC) chief executive Robert Wallace told The Daily that the university’s investment returns over the past year have set a “record year for Stanford, both in terms of increasing percentage investments and absolute dollar gain ”. The data indicates that these returns far exceed those of previous years, especially after a slight drop in endowment returns from 2016 to 2020.

The median endowment return for U.S. colleges and universities this year was 33.4%, according to Stanford News, placing Stanford’s performance 6.7% above the median. Last year’s median return in US institutions was 1.6%. This is a 31.8% year-over-year increase, indicating that this year has been a booming year of returns for many institutions.

Duke University and MIT have been the most successful among Stanford peer institutions, with returns of 55.9% and 55.5% in the past year, respectively. Of the 10 schools listed above, Stanford placed eighth. Wallace added that Stanford’s returns place the university in the top quartile of all U.S. colleges and universities.

Another set of measures commonly used to assess university endowments are annualized 5- and 10-year net returns, which average a school’s endowment performance over longer time periods. Stanford’s 5- and 10-year yields are 14.7% and 10.8%, respectively, which remains well above the national medians of 11.9% and 8.4%, according to Stanford News.

As a result of the endowment growth, the board has allocated an additional $ 500 million of the endowment money to the university’s budget, according to Miranda. This additional funding will complement the $ 1.4 billion already allocated to the endowment budget, a slight increase from last year’s allocation of $ 1.3 billion, to which the University added $ 379 million. additional dollars to support expenses related to COVID-19.

“These funds will be used to support our core academic mission and accelerate our education, research, affordability, inclusion and awareness activities as part of our long-term vision,” Tessier-Lavigne told Stanford News.

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